The inflation genie could be out of the bottle — and bond markets are sounding the alarm

A sharp sell-off in global government bonds is exposing investor anxiety that the macroeconomic backdrop may be shifting toward persistently higher inflation, as governments struggle to rein in spending and sovereign debt.Pressure on yields is not just a factor of this year's rise in government borrowing and higher energy prices. Investors highlight a pivot away from globalization toward protectionism, and geopolitical tensions, which have materialized in trade tariffs, industrial reshoring and increased defense spending, as signs of a broader shift that could keep inflation structurally higher.That would mark a decisive break from the generally low and comparatively stable inflation environment that followed the global financial crisis — heralding wide-ranging implications for investors' portfolios.Stock Chart IconStock chart iconU.S. 10-Year Treasury."Structural features of the global economy have shifted and now create inflationary, rather than disinflationary impulses," said Emma Moriarty, portfolio manager at CG Asset Management."Tariffs, and then more recently, the outbreak of war in the Middle East have been the sharp end of this changing order. It is wrong to think of the e...